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First Niagara Financial Group Inc. Message Board

  • techglass1 techglass1 Nov 14, 2012 9:47 AM Flag

    FNFG's real value and stock performance

    FNFG's management did a horrific job aquiring the HSBC branches. They made every mistake in the book. They leaked that they were bidding for the branches causing the stock to fall, they talked their own stock down in a confernce call to analyts in the fall of last year before issuing stock and ended up doing a deal at $8 when the stock had been $14 just months before. The dilution was so intense thaTBV or tangible book value was reduced by almost 30% and the dividend was cut in half to help finance the deal. The investment bankers and upper management should have been canned for diluting shareholders as much as they did...just the worst. The good thing is that despite their terrible acquisition they are great at managing their core business. bank stock trade at multiples of TBV and last quarter showed that they are once again building TBV up. The stock should sell at 2x TBV or $9 a share. As they build book it should go higher. Its a buy and a 4.2% dividend while you wait.

    Sentiment: Buy

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    • the whole situation fell apart when, in early Auq\g 2011, all the bank stocks got crushed (Ican't remember the reason). Until that point the HSBC acquisition was going fine since FNFB was at the $14 level. Once ALL the bank stocks fell sharply, FNFG was suddenly in a position of having to issue more shares than planned for the acqisition. That led to the dilution problem, the capital problem and the divident cut. Their mistake was, if they were going to use cash for the acqisition, they should have sold shares immediately to raise the cash, instead of assuming the price would remain near the $14 level they counted on

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